MorphoSys is letting go of parts of its therapy pipeline as global licensing rights for its preclinical cancer program have been handed over to Novartis for a handsome sum of $23M.
According to a release, Constellation Pharmaceuticals, a subsidiary of MorphoSys, signed the deal with Novartis to research, as well as develop and commercialize the company’s preclinical inhibitors of a new cancer target. The program was added to the company’s pipeline following the acquisition of epigenetics biotech firm Constellation Pharmaceuticals which set it back $1.7B last year.
MorphoSys is a worldwide commercial-stage biopharma firm that is focused on the discovery, development, and delivery of groundbreaking cancer therapies to patients. MorphoSys was founded in 1992 and operates out of Planegg near Munich in Germany. It also has operations present in the United States, in Boston, Massachusetts.
Novartis is an American-Swiss multinational pharma corporation that operates out of Cambridge, Massachusetts in the United States and also Basel, Switzerland. It was founded twenty-six years ago in 1996 and holds the title of one of the biggest biopharmaceutical names on the planet. The firm has a global reach and has nearly 110,000 employees from all around the globe. In comparison, MorphoSys has under a thousand employees and was founded 4 years before Novartis.
The agreement terms state that Novartis will head all of the program activities. MorphoSys will receive some milestone payments and royalties along with the agreed upfront sum of $23M.
The German firm has been rotating its pipeline since the start of the year when it gave the chop to a few of its autoimmune-focused programs and sold several assets to the new entrant in the biotech industry HI-Bio to shift its entire focus to oncology. Another cutback was made by the company when its lab operations were shifted back to Germany in Planegg, and the early research work in the U.S. was scrapped. However, the drug development work will be done in the States.
Jean-Pail Kress, MorphoSys’ Chief Executive Officer said in a release, “We are pleased that our trusted and long-standing collaborator Novartis will continue to drive this program forward. Novartis has strong medicinal chemistry, oncology development, and translational research capabilities to realize the full potential of this novel cancer target. At MorphoSys, we will continue to focus our resources on driving our late- and mid-stage oncology pipeline forward, which has the potential to enhance the standard and quality of care in difficult-to-treat and debilitating types of blood cancers.”
The news of the agreement was welcomed in the stock market as MorphoSys shares gained 1.4% up to the share price of $4.35 as of Wednesday. Novartis’ shares went up almost 1.1% to $91.74 but the change cannot be attributed to the deal alone.